Today in the press

Updated / July 5, 2013 11:55

A look at some of today's business stories in the newspapers

FÁS TAKES €1.1m HIT ON TEMPORARY OFFICE FOR JUST 17 STAFF - FÁS has admitted that it has taken a €1.1m loss on a temporary office for just 17 staff in Offaly, reports the Irish Independent. The office in Birr was leased in 2004 for ten years at an annual rent of €100,000. The aim was to build a permanent headquarters in the town later on as part of former Fianna Fáil Minister Charlie McCreevy's decentralisation programme. But after cancellation of the decentralisation project, FÁS moved to pull out of the lease. It had to write off €1.1m on fixtures and fittings it had put into the temporary office. The 17 staff have since moved to FÁS's office in Tullamore or to the Department of Social Protection. FÁS also spent €1.5m on buying a site to build a permanent office near Birr- but has now put up this site for sale at a minimum price of €150,000. At the Dail's Public Accounts committee, Labour TD Derek Nolan said it seemed like an extraordinary waste of money.

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END TO ERA OF AUSTERITY BUDGETS NEAR, CLAIMS NOONAN - Ireland is within “touching distance” of no longer having to frame annual austerity budgets, Minister of Finance Michael Noonan has told members of the financial services industry writes the Irish Times. “We have a difficult budget coming up in October,” said Mr Noonan. “However, once delivered we will be within touching distance of the 3% deficit target [set by the EU] and the days of massive budget adjustments will be behind us.” Last weekend Mr Noonan said an adjustment of between €2 billion and €3 billion would be required from this year’s budget, which will be delivered on October 15th, in line with new EU requirements. Mr Noonan said the National Treasury Management Agency’s funding requirement for the State had been reduced by €40 billion as a result of deals struck this year on the Anglo Irish Bank promissory notes and the extension of maturities of our loans with the European Financial Stability Facility and the European Financial Stability Mechanism. “My focus is now turning to the ESM [European Stability Mechanism] and the possibility of using it to retrospectively recapitalise the Irish banks. By this I mean generating a return to the taxpayer from their investment in AIB, Bank of Ireland and Permanent TSB,” said Mr Noonan at the annual lunch of Financial Services Ireland in the new Marker Hotel, Dublin. He said Ireland had secured a commitment from Brussels in the past fortnight to “examine the possibility of retroactive recapitalisation on a case-by- case basis. This opens up opportunities for Ireland that I intend to fully explore and the objective is to move the Irish debt closer to the EU average.”

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RYANAIR HIRES 140 CONSTRUCTION WORKERS FOR HEADQUARTERS - Ryanair has taken on 140 construction workers to fit out its new offices in Airside Business Park in Swords, which will become the company’s new headquarters, says the Irish Examiner. The tender for the extensive work went to John Paul Construction who will be responsible to for fitting out the 100,000sq ft building that will house all of Ryanair’s Irish operations, including its commercial, customer service, finance, IT, legal and marketing departments. Ryanair’s spokesperson Robin Kiely said that there would be large cost saving by moving all of Ryanair’s staff in under one roof. “This brand new 100,000sq ft state-of-the-art building will house all of Ryanair’s Irish operations and some 400 staff will be based there when we complete our move before the end of 2013. This is a significant investment by Ryanair, allowing us the space and facilities to further develop our Dublin organisation, at much lower costs than the high rents on the Dublin Airport campus and allowing other staff currently housed in satellite offices to be brought together under one roof, resulting in a large reduction in rental expenses and further cost savings,” he said.

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IMF URGES MORE ACTION FROM ECB TO TACKLE ITALY'S RECESSION - The International Monetary Fund has urged the European Central Bank to do more to help combat Italy’s deep recession, including more cheap cash for banks and the direct purchase of packaged loans for small businesses. As it downgraded its growth forecasts for the eurozone’s third-largest economy, the IMF said another injection of bank liquidity “of considerable tenor and lower haircuts on eligible collateral would help lower bank funding costs and lending rates”. The Financial Times says that the conclusions of the IMF’s annual review of the Italian economy are a challenge to the ECB, which has shown little enthusiasm for a fresh injection of bank liquidity or action to promote lending to small businesses in the eurozone’s southern economies. The fund said strong headwinds were holding back Italy’s economic recovery after more than two years of recession. It predicted a slow turnround only at the end of this year. The IMF downgraded its GDP forecast for 2013 to -1.8% from the fall of 1.5% it predicted in April. However, it raised its growth forecast for 2014 to 0.7% from a previous 0.5%.

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